and was estimated to be worth billions of pounds (Silver, 2018 ). Much of this growth has emerged from the local and national government focus on remaking the private rented market, with a shift in emphasis from the ‘Buy to Let’ sector to the larger scale, institutionally friendly, ‘Private Rented Sector’ (PRS). These changes in the way in which housing is constructed, operated and owned have been understood through the term financialisation , which conveys how financial actors such as pension funds, sovereign wealth funds, billionaires, private equity and other
For a number of decades our economy has failed to work for ordinary citizens. Stagnant wages have been combined with underemployment and rising costs of basic goods like healthcare, education and housing. At the same time, a small minority of the population make obscene profits, while in the background we continue to hurtle headlong into an environmental emergency. However, despite there being no shortage of anger and anti-elite sentiment expressed in what is often referred to as the ‘culture wars’, no significant challenge to the dominant economic model has broken into the mainstream. The pound and the fury argues that behind this failure of imagination are a set of taken-for-granted myths about how the economy works – myths that stifle debate and block change. The book analyses these myths, explores their origin, how they circulate and how they might be dispelled at a time when, away from the public gaze, economic theory is opening up new possibilities of economic action. Possibilities that, as we emerge from the chaos of Covid-19, could lead to the radical structural changes we desperately need.
Financialisation as a product of virtual fictitious financial capital
Aleksander Buzgalin and Andrey Kolganov
capital. At the surface level, this transformation has revealed itself as financialisation. Financial capital, the result of the fusion of banking and industrial monopolies, used the financial market both as an instrument of its reign and, at the same time, as a mode of solving of the problem of over-accumulation of industrial capital. The bubble-like growth of the financial market reflects the need of financial capital to appropriate profit on a global scale through financial instruments. This hegemony of financial capital (which became transnational) is developing in
The bank guarantee and Ireland’s financialised neo-liberal growth model
chapter first poses the bank guarantee as a moment of Irish neo-liberalism failing forward by examining the context in which the guarantee was announced and how Ireland’s subsequent banking bailout became the most costly bailout of the global financial crisis. It then explores the nature of neo-liberalism by considering recent debates of its non-demise and of how they have played out in the Irish case. The final section widens the focus again and considers the concept of financialisation and the financialisation of Ireland’s political economy, locating the guarantee
national economy. 61
clearly alert to aspects of the growing power of finance capital
that capture the attention of modern writers concerned with
‘financialisation’. However, he had a fundamentally
different understanding of these phenomena.
In defining finance capital, Lenin
the exit polls, almost four in ten voters (39 per cent) said that they sought a candidate who could ‘bring needed change’. The desire for a candidate who had ‘the right experience’ was secondary. Among those who wanted change, Trump secured 83 per cent of the popular vote compared with just 14 per cent for Clinton (Cillizza, 2016 ). Clinton not only represented ‘big government’ and the status quo, but also the elites that promoted trade liberalisation, financialisation and the politics of the ‘new economy’ that had so brutally displaced the old.
as part of the
wider corporate takeover and financialisation of public services
outlined in chapter 1. The second section unpacks official claims
that the inflated cost to the public purse of using private finance
over direct government borrowing is justified by the superior
‘value for money’ delivered through PFI’s ‘risk transfer’ and
‘payment by results’ model. I show that such claims amount to
an accounting trick that exaggerates public sector inefficiency and
private sector risk-taking while ignoring the greater social costs
of using PFI. The third section
regeneration under PFI, lessons that are still being ignored by government:
the need to restore accountability and power to residents; the
need to re-regulate construction and housing pro
vision in the
interests of safety; and the need to end the privatisation disaster
through a programme of reforms that will gradually phase out PFI
and outsourcing, push back the financialisation of housing and
land, and restore a reinvented public housing model based on the
Bevanite principle of treating housing as ‘a social service’ and not
a commodity, as outlined in chapter 1.
The introduction sets up the parameters and argument of the book. It opens with the International Monetary Fund’s valuation of a single whale to question the use of setting the monetary value of nature, opening out to demonstrate that this is just part of the financialisation of approaches to ecological and climate crises. The introduction then goes on to spell out the different aspects of economic thinking inherent in these approaches, which will be explained and analysed in the following chapters.
The starting-point for the book is its chapter on methodology. Found here are not only critiques of conventional Soviet Marxism-Leninism and post-modernism, but also a new rethinking of the classic dialectic. For the most part, however, the book focuses on revealing the new quality now assumed by commodities, money, and capital within the global economy. The market has become not only global, but a totalitarian force that is not a ‘socially neutral mechanism of coordination’. It is now a product of the hegemony of corporate capital, featuring the growth of new types of commodity: information, simulacra, and so forth. The book demonstrates the new qualities acquired by value, use value, price, and commodity fetishism within this new market, while exploring the contradictions of non-limited resources (such as knowledge) and the commodity form of their existence. Money is now a virtual product of fictitious financial capital, possessing a new nature, contradictions, and functions. This analysis of the new nature of money helps to reveal the essence of so-called financialisation. Capital has become the result of a complex system of exploitation. In the twenty-first-century context this exploitation includes the ‘classic’ extraction of surplus value from industrial workers combined with internal corporate redistribution of income by ‘insiders’; international exploitation; and the exploitation of creative labour through the expropriation of intellectual rent.